In the letter
- The outstanding crypto loans in DeFi logs have now exceeded $ 3 billion.
- The space has been booming in recent months.
- Connection is king, but how long?
The value of outstanding Cryptocurrency Loans for the three most important decentralized financing arrangements (DeFi) Loan logs has exceeded $ 3 billion, according to a dashboard from Dune Analytics.
On aave, connection and MakerDAOThere is $ 3,078,085,890 in loans outstanding and users borrowed $ 98.8 million per dashboard last week.
These lending platforms are different from regular crypto lending companies. They are protocols that are decentralized so that no single entity controls the money that flows through them and nobody asks you to verify your identity.
Connection is by far the most popular platform; A little more than half of all outstanding loans are currently on Compound, or $ 1.6 billion. There is approximately $ 1 billion in outstanding loans at MakerDAO and $ 361 million at Aave.
Compound’s growth took off in late June, shortly after Compound issued COMP, a governance token, to all users of the platform. The governance token is designed to allow users to vote on proposals to update the network. However, COMP also trades on secondary markets, which gives users an incentive to use the platform.
While Compound retained its advantage over Maker and Aave, these platforms squatted away from its success and boomed in the summer and fall.
The gap is starting to close. In July, when Compound was best, the credit protocol captured 81% of the market share. Aave held 2.55% of the market and MakerDAO 15%. Compound now holds 52% of the market share; Aave holds 12% and MakerDAO holds 33%.
Although Compound Maker can trump in terms of the value of outstanding loans, 75.7% of all loans, or $ 2.3 billion, are for DAI, the decentralized Stablecoin created by Maker. A single DAI token is worth one US dollar. His pen is held by an algorithm.
It will be interesting to see if Compound maintains its dominance in the coming months or if the COMP boom has given it a temporary advantage that will continue to fade.
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The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.